Here’s What To Expect From Another LTRO

For better or worse, the European Central Bank’s long-term refinancing operation has been praised as the savior for global markets. Stocks have soared since the LTRO was put into action late last year, the euro has rallied and volatility has waned.

While the second installment of the three-year LTRO is expected tomorrow, analysts are busy debating the size and scope the ECB needs to implement to at least match lofty expectations.

Risk assets, such as stocks, have rallied as the threat of a worst-case scenario has diminished. Analysts generally think the second LTR will be about EUR500bn, similar to the first one implemented in December.

Ahead of tomorrow’s developments, Barclays Capital has run an informal survey of its client expectations for the second LTRO. A total of 204 clients ranging from institutional asset managers, to banks, macro hedge funds and reserve managers were surveyed.